Firm that paid Kasich won Ohio tax credits

Thursday

Aug 15, 2013 at 12:01 AMAug 15, 2013 at 3:12 PM

Subsidiaries of a company that’s helped sustain Ohio Gov. John Kasich’s political career and contribute to his personal bank account have received tax breaks worth more than $619,000, brokered by the new job creation board he appoints.

Julie Carr Smyth

Subsidiaries of a company that’s helped sustain Ohio Gov. John Kasich’s political career and contribute to his personal bank account have received tax breaks worth more than $619,000, brokered by the new job creation board he appoints.

Longstanding and extensive financial ties between Kasich and Worthington Industries, a Fortune 500 steel processor in central Ohio, are raising new ethics questions in the era of JobsOhio, a semi-private panel of business leaders appointed by the governor and largely shielded from Ohio ethics and public records laws.

Kasich, a Republican, joined the Worthington Industries board in 2001, as he left Congress. The company’s founder and late chairman, the powerful John H. McConnell, was an architect of Kasich’s political rise from state legislator to congressman to governor — joining family members and employees in giving hundreds of thousands to his campaigns and political committees over the years.

Kasich served a decade on the board while working in the private sector and was paid more than $611,000 as a board member between 2007 and 2011, the company’s federal business filings show.

Kasich quit the board a day after winning the 2010 gubernatorial election but continued to receive deferred payouts for three years, according to his financial disclosure forms. The fiscal year 2011 payment of just under $103,000 came, like an unspecified portion of his deferred compensation, after he’d taken office. That was the year JobsOhio was created.

It was less than a year after Kasich’s final payment from the company that the Ohio Tax Credit Authority began approving a series of job-creation tax credits for two Worthington subsidiaries. JobsOhio had recommended the tax deals to the board.

The governor had severed all financial ties to the company by the time the tax deals were approved, spokesman Rob Nichols said. However, Worthington Industries CEO John P. McConnell did donate $100,000 to the Ohio Republican Party amid the awarding of the tax credits.

“Those who are politically active have the same right to use job-creation incentives as those who are apolitical, and Ohio’s transparency rules exist to give the public confidence that the appropriate rules and processes are followed,” Nichols said.

But JobsOhio has faced legal and transparency questions nearly from the beginning. Structured to “move at the speed of business,” the entity is funded by proceeds from state liquor profits. Ohio’s Republican state auditor has subpoenaed its financial records and Kasich’s 2014 Democratic rival has called for an ethics review amid new conflict of interest concerns.

Under state law, someone tied to a business can’t steer state government benefits to that business. Elections laws also restrict the size and timing of government contracts going to an official’s campaign donors.

Yet it’s unclear how such provisions apply, if at all, to directors of JobsOhio or to the governor who created and appointed the body— because technically the panel’s role is only advisory and because the law that created it is so new. The Ohio Ethics Commission is likely to take up that and other questions surrounding JobsOhio’s structure if it proceeds with a request to do so by Kasich’s gubernatorial rival, Democrat Ed FitzGerald. The ethics group is to consider that request Thursday.

A corporate spokeswoman didn’t immediately reply to a call and email seeking comment.

Republican Party spokesman Chris Schrimpf said Democrats are trying to turn Kasich’s business background into a negative with a candidate in FitzGerald whose portfolio goes little beyond his personal savings account.

“Ohio voters wanted a governor with real-world private sector experience and the Democrats are attacking him with a candidate who has no investments and no experience creating jobs,” he said.

State ethics laws typically provide a line between politically generous business interests and the state goodies controlled by those they help elect, said Edwin Bender, executive director of the National Institute on Money in State Politics.

“For agencies to exempt themselves from ethics rules should be a flag that people would want to say, ‘Wait a minute. Why?”’ Bender said. “And for a company to be paying a sitting governor tens or hundreds of thousands of dollars doesn’t pass the smell test.”

JobsOhio policy mandates that the board’s directors disclose potential conflicts of interest to the Ethics Commission, said spokeswoman Laura Jones. Ohio Democrats are seeking copies of those forms under state public records law.

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